Stockmann to open distribution centre at Finland in 2016

February 03, 2014 (Finland)

Stockmann has signed an agreement with SRV on the construction of a new distribution centre. The distribution centre, which will be completed in 2016, will be located in Jussla in Tuusula, Finland. The centre will be financed and leased by Ilmarinen.

The new distribution centre will serve Stockmann’s nine Finnish and Baltic department stores more efficiently than before, and enable strong growth for the Stockmann online store in Finland and its expansion to the Baltic countries. In addition to operational improvements, Stockmann is targeting an annual cost saving of approximately EUR 6.5 million, primarily in the form of reduced personnel, transportation and real estate expenses. Savings are expected to be achieved in full from 2018 onwards.

To achieve highly-automated operations as planned, Stockmann will make a significant investment in automation technology. The amount of capital expenditure will be confirmed once a decision on the automation technology provider is made.

The current warehouse operations of the Finnish department stores and online store in Pitäjänmäki, Tammisto, Vantaanrasti, Pakkala and Viinikkala will be transferred in stages during 2016 to the new distribution centre and the Baltic warehouse operations in Riga will be transferred in 2017. Hobby Hall logistics in Viinikkala and Tammisto will, for the time being, remain as before.

The centralised distribution centre is expected to require considerably fewer employees than at present. The changes may lead to a reduction of a maximum of 200 man-years (FTE) at the warehouses in Finland and a maximum of 50 man-years (FTE) at the warehouse in Latvia. Consequently, Stockmann will start co-determination negotiations covering approximately 430 employees in the warehouses in Finland.

Stockmann estimates that a significant number of the personnel cuts will occur through retirements and through the employee turnover that is typical for the sector. Potential personnel redundancies will not take place before the second half of 2015.

Energy efficiency, waste management and other environmental perspectives will be taken into account in various ways in the construction and operations of the distribution centre. The aim is for the project to qualify for LEED Silver environmental certification. By centralising the warehouses in one place, delivery journeys in the Helsinki metropolitan area will be significantly reduced.